Like forex or the stock exchange, investing in cryptocurrency can be lucrative or risky depending on the demand for digital currency. Bitcoin and Ethereum, which are the two of the most popular crypto coins, keep fluctuating. When investing in either option or other coins, it’s best to look at it from a different angle which involves direct exposure to the world of digital currency.

As you embark on your journey to land the best cryptocurrency to invest in, knowing what platforms can increase your chances of getting the best deal is essential. Whether you are joining the crypto market as a new investor or just started dipping your toes in the fledgling new breed of currency, here are some key factors to consider.

While Bitcoin remains a popular digital coin, many others are grabbing the fair market share that newbie investors can try. It boils down to where to buy cryptocurrency. Here is a list of platforms that connect prospective buyers to eligible custodians, crypto exchanges, and e-wallets.

Best Overall: Bitcoin IRA Best Value: BlockFi Best Interface: Coinbase Best Security: Crypto.com Best Exchange Solutions: Kraken

Bitcoin IRA is a platform that links you with e-wallet keepers and crypto exchange programs to conduct crypto transactions at any time and anywhere. Besides offering tax breaks, Bitcoin IRA helps you maximize your financial growth in a tax-free space. It also shares insight into how the market behaves, allowing you to take the necessary first step.

To get started, you will need to create an account that allows you to access your dashboard and e-wallet for funding and live pricing. It also provides a wide array of tips through tutorial videos and articles. Next, you can fund your IRA account and wait for 3-5 business days for approval. Finally, you can start self-trade your digital assets through your account.

As you trade through Bitcoin IRA, remember the digital currency space is very unpredictable, so you’ll want to make sure you have sufficient funds, experience in crypto self-trading, and the willingness to bear the risks of a potential loss of your investment. Fortunately, Bitcoin IRA's dashboard has various educational and price tracking features to guide you along.

The best way to enter the crypto trading space or merge conventional finance and cryptos is by investing through a platform that guarantees zero hidden fees or minimum deposits. That's pretty much the reason BlockFi was born. As one of the most recognized US-based and regulated platforms for crypto-trading, BlockFi can reward you with a compounding interest ranging from 3% and 8.6% on your cryptocurrency investment. However, the interest rate may vary depending on the type of currency you are trading and the market trends.

Gone are the days when only banks and micro-finance institutions were the only places you could borrow from. Now BlockFi can lend you without selling your digital coins for a low interest. That means you do not have to submit your capital gains, saving you from burdensome taxation. Recently, BlockFi became the first platform to launch a Bitcoin reward system through credit cards. Once you earn your first reward, the money will be credited to your account to earn interest immediately.

If you are looking to trade in other crypto coins besides Bitcoin, look no further than Coinbase. The digital coin trading platform was founded in 2012 and is licensed and fully regulated by the US crypto exchange market. When it started, Bitcoin trading was the only activity that the platform authorized. As the demand for other currencies keeps rising, Coinbase welcomes Ethereum, Bitcoin Cash, Litecoin and many others, provided the users adhere to the terms and conditions for self-trading. Now, with Coinbase, you can earn up to $29 worth of Crypto.

The tricks to using Coinbase's dashboard are simple. It starts with creating an account and funding it using your mobile or desktop version. The dashboard has a wide array of features that allow you to build your portfolio. You can buy or sell crypto coins and monitor their performance in one place. The recurring daily, weekly, and monthly buys feature guides you on investing in cryptocurrency gradually over time. Finally, the vault protection feature provides high-grade security for your personal and financial details.

Crypto.com, a digital asset exchange platform, invites you to a storeroom filled with various products and services, from an easy-to-use interface supported by an app to great referral program initiatives. Whether you want state-of-the-art security or quality-assuring e-wallet solutions, Crypto.com will have you covered. Unlike Coinbase, joining Crypto.com is way cheaper. Self-trading is not the only thing you can expect from its exchange program either. Rather, you can earn rewards for referring a friend to the platform and interest and deposits.

When you make credit card purchases on Crypto.com, you earn as much as 0.45 maker fees plus 2.99%. The platform is home to around 137 currencies, making it one of the popular choices for beginners and veteran crypto enthusiasts. Setting up an account with Crypto.com involves a two-step verification process that is instant and guarantees security against third-party theft and cold storage. Once you join, get ready to purchase, sell, gain, withdraw, and exchange e-wallets with other custodians on the platform.

Following the launch of Bitcoin in 2009, crypto exchange programs set the scene to accommodate the growing need for cryptocurrency trading. One such exchange program that followed suit two years after Bitcoin's launch is Kraken. While many years of service is not always synonymous with quality, Kraken continues to offer fiat currency solutions for newbies and advanced crypto-exchange enthusiasts. Today, users can access up to 20 currencies using five fiat currencies like USD, CAD, Japanese Yen, Euro, and Great British pounds.

Unlike other exchange programs, Kraken offers advanced services such as OTC trading, dark pool, futures trading and margin trading. While newcomers may find navigating their way around these services daunting, they can still check out the dashboard for tips. Following its predecessor's (Mt.Gox) security threat, Kraken relies on proof of reserves audit to protect its users from fraud and other forms of malpractices. That means a user's details and financial information will be stored offline in cold wallets.

With headquarters in San Francisco, Kraken maintains transparency by keeping its investors public, making it one of the cryptocurrency market's most secure and trustworthy exchange platforms.

Now that you have decided to invest in Bitcoin and other top cryptocurrencies through an exchange program, knowing the benefits and risks of choosing any of the five options can make or break your self-trading experience. 

Joining some programs may attract hidden charges, but the rewards are worth your investment. On the other hand, others do not impose any registration or retainer fees, but they still have a lot to offer regarding rewards and other perks. Before narrowing down your choice, ensure you read the terms and conditions. Only the dedicated, disciplined, and sufficient capital for investment can survive the test of time since the crypto market is so volatile.

MarketWatch has highlighted these products and services because we think readers will find them useful. We may earn a commission if you buy products through our links, but our recommendations are independent of any compensation that we may receive.

Investing in crypto may be easier and faster than ever — you can now opt to invest through online brokers like Robinhood and SoFi Invest or crypto exchanges like Coinbase and Gemini— but it’s far from being a foolproof venture. Many of the same risks and pitfalls that vexed crypto pioneers can still cause headaches for those entering the field today. That’s not to say that navigating the crypto universe requires a masters in computer science or finance; rather, it just means that some of the financial resources, protections and patterns investors have come to expect when trading stocks and bonds will be different when trading crypto.  Learning the rules of this new digital investment game is essential and could potentially save you from making mistakes worth thousands, or even millions of dollars. Here are a few mistakes that new crypto investors often make when they get started, as well as some things to consider before taking the plunge.

If you decide to buy Bitcoin, make sure it’s the genuine article. One of the biggest mistakes new investors make is buying the wrong coin. Just because it has ‘Bitcoin’ in its name doesn’t mean it’s a Bitcoin. There’s Bitcoin Cash, Bitcoin Gold, Bitcoin SV, Bitcoin Private and dozens of other direct offshoots of the original cryptocurrency that have the word “Bitcoin” in its name. That’s not to say that these offshoots are bad or scams, it’s just that they aren’t the original Bitcoin that has become widely traded and quoted. But if you do buy the wrong coin, it isn’t the end of the world. You can always sell it back and buy the right one, hopefully at a profit.  

Ready to get into crypto? You can buy Bitcoin, Ethereum and other cryptocurrencies via online brokers like Robinhood and SoFi Invest or crypto exchanges like Coinbase, Gemini or eToro.

You’re going to need nerves of steel if you get into this space because the volatility is extreme. “Compared to the analog world or the traditional finance world, volatility is kind of off the charts,” Theresa Morrison, a certified financial planner in Arizona, told Marketwatch.

Morrison recommends that new investors commit a nominal sum at first, even as low as $50 a month, to an established cryptocurrency they understand, and then to forget about it. The swings in volatility are such that if an investor is constantly eyeing the market it could drive them crazy.  Furthermore, if you’re new to the crypto world, you may want to stick to cryptocurrencies that you know and understand at first. “I like my clients to look at established coins first – the ‘Blue Chips’ of crypto, if you will, namely Bitcoin and Ethereum,” says Erik Goodge, an independent certified financial planner based in Indiana.

Believe it or not, many new and veteran cryptocurrency traders have lost money sending their coins to the wrong place. Unlike a bank wire transfer that can be halted or a check that can be canceled, there’s often no recourse if you make a fat-finger error. 

“I got a good buddy who was trading Stablecoins and he sent USDT to a USDC address and lost $4,000,” Adam Blumberg, a financial planner in Houston, recounted. “He texted me saying that this transaction is two days old and he doesn’t know what’s going on. When he sent me the transaction I told him he had accidentally sent it to a USDC account and asked me if he could call them to fix it and I was like ‘no, it’s gone – you should have called me first before you did this.’”

Ready to get into crypto? You can buy Bitcoin, Ethereum and other cryptocurrencies via online brokers like Robinhood and SoFi Invest or crypto exchanges like Coinbase, Gemini or eToro.

While there will only be 21 million Bitcoins that will ever be mined, less will trade because many of them are simply lost forever as people have forgotten the passwords to their digital wallet. You often can’t call somebody to reset your password, if you forget it or lose it then you’re locked out. Around 20% of the Bitcoins mined so far are lost in stranded wallets, according to Chainalysis, a cryptocurrency data firm. Therefore, how you store your password is critical and needs to be thought out in advance before you start trading. Writing it down on a piece of paper is the first step but even that has its own concerns as it can then be stolen and used by someone else. Also, paper is not the most durable material. “I have clients who wrote down their passwords and kept them in a special place in their house,” Blumberg said. “But a couple of years ago, when Houston was hit with those terrible floods,” many of those carefully hidden passwords dissolved in swamp water.

Blumberg recommends putting the password in a flood-safe and fire-proof container or keeping it in a bank safety deposit box. As an alternative to writing it on paper, he has seen some clients get their passwords stamped on metal that can resist the elements.

Ready to get into crypto? You can buy Bitcoin, Ethereum and other cryptocurrencies via online brokers like Robinhood and SoFi Invest or crypto exchanges like Coinbase, Gemini or eToro.

About the author: Cyrus Sanati has been a financial journalist and columnist for nearly two decades, covering a wide variety of topics from the energy markets to digital currencies. His work can be seen in a variety of publications, including The Wall Street Journal, The New York Times, Fortune Magazine and Breakingviews. He is a graduate of UCLA and earned post-graduate degrees in journalism and business from Columbia University. 

Also see: What you need to know to start investing in cryptocurrency right now

A virtual currency guidance and advisory issued by the U.S. Treasury Department’s anti-money laundering (AML) unit on June 30, 2021 clarified regulatory expectations, riled some cryptocurrency players and signaled a potential new global standard for combating financial crime.

The statement added that the guidance “does not establish any new regulatory expectations” and “consolidates current FinCEN regulations, guidance and administrative rulings.” FinCEN has broad international reach to any business doing substantive business with U.S. persons and therefore international businesses need to be paying attention if they source cryptocurrency from U.S. exchanges or interact with U.S. consumers.

Any time FinCEN issues an advisory, compliance officers in both banks and virtual currency companies will spend a fair amount of time over the next few days reviewing the advisory in the context of their businesses and customers. Concerns include another round of bank account closures, not because customers are engaging in illegal activity, but because compliance officers and managers lack an understanding of the technology underlying cryptocurrencies as the easy way out rather than invest the time and effort to learn more about the space.

           Although owners of blockchain based investments most commonly hold cryptocurrency, blockchain technology is expanding into non-currency areas. In both, however, there are risks mainly because 1) estate planners and family members are ill-informed about the presence and nature of blockchain assets,  2) clients fail to realize that wills and trusts must have specific language to allow Personal Representatives and Trustees to manage those assets after incapacity or death, and 3) the regulatory environment, taxation, reporting, application if intestacy laws and other issues have yet to be resolved.

Traditional planning entities also have a hard time owning cryptocurrency, especially if there is a fiduciary duty owed to beneficiaries to prudently invest assets.  Without specific language, a trust or other entity will not be able to hold cryptocurrency, but if that language is written too broadly, the fiduciary may be exempt from damages due to willful neglect. Also, cryptocurrency is treated as property rather than as currency by tax authorities for tax purposes meaning that the fair market value is set by conversion into the taxing authority’s currently, that is U.S. dollars for the IRS, at “a reasonable exchange rate” and transactions involving cryptocurrency are subject to the capital gains tax regulations. This can result in the cryptocurrency being taxed at one value in one country and another value in another country. 

On top of all this, care needs to be taken to preserve the benefits of cryptocurrency. Cryptocurrency is highly secure, but that security is in jeopardy if the private key or seed phrase is carelessly recorded. With the right private key or seed phrase, anyone can access the cryptocurrency, so planning and procedures have to include how to secure this information. Like cash, cryptocurrency is not traceable. There is no electronic or paper trail linking the parties together in a transaction involving cryptocurrency. To preserve that privacy, you will need to plan that other documentation in the transaction does not reveal these identities, or at least that information is privileged. Shorter transfer delay and lower costs. Unlike hard currency, transferring cryptocurrency takes only moments and there are few, if any, transfer costs. 

So, what to do? First, educate your estate planner and family about any blockchain based assets, especially cryptocurrency, you own. If the value of those assets exceeds $10,000, and the assets are in custody with a fiduciary or institution that is “offshore” Make sure that you are also reporting that investment annually and that the custodian that holds the assets has the capacity to invest the time and effort required to comply with the myriad changes as they occur.

As a fourth generation estate attorney and managing partner of Erskine & Erskine LLC, I provide creative estate and strategic tax planning for business owners,

As a fourth generation estate attorney and managing partner of Erskine & Erskine LLC, I provide creative estate and strategic tax planning for business owners, collectors, and their families.My true passion is customized planning for collections as well as legacy real estate and family businesses. A love for history and the law drive me to achieve the objectives of security, satisfaction, and growth. Counseling families since 1876, our firm has provided me great perspective in this area of law. Utilizing tools like personal trusts, dynasty trusts, private foundations, and family offices is our specialty. Based in the Worcester, Massachusetts area, I am an active member of the American Antiquarian Society, Worcester Economics Club, and the John J. Kittredge Numismatic Foundation. A Lawrence Academy alumnus, I received my B.A. in Medieval History from Carleton College, and J.D. from Suffolk University Law School.

The price of Bitcoin dropped back below $30,000 for the first time this month on Tuesday, though it had risen back to above $32,000 as of Thursday afternoon. 

Crypto regulation was back in the news this week, with a statement from the U.S. Treasury Department and proposed new cryptocurrency regulation from the European Union. Fresh comments from Tesla CEO Elon Musk also coincided with a brief rise in value for Bitcoin and Ethereum. 

Here’s a rundown of the latest big crypto news:

At the same time, the price of Ethereum bounced from a low of around $1,733 to a high of $2,012, according to Coindesk, a normal swing that parroted the fluctuation of Bitcoin.

Bitcoin is the largest cryptocurrency by market cap, and a good indicator of the crypto market in general, since other coins like Ethereum (and smaller altcoins) tend to follow its trends. Even though Bitcoin fell below $30,000, it was a pretty normal dip for the crypto, which saw more than a 50% decrease in value in past months from an April high of $60,000. That’s not to say investors should take the fall lightly, and this is also why investing experts recommend only investing in crypto whatever you’re OK with losing.

The cryptocurrency space is still very new, and everything from innovation to regulation can have outsize impact for investors. Here’s how you can invest smartly, regardless of what’s making news or Bitcoin’s price swings.

How Investors Should Deal With Volatility

Cryptocurrency volatility is nothing new, and you should be comfortable with this if you decide to invest. 

Volatility can be attributed to an “immature market,” says Ollie Leech, learn editor at Coindesk, a cryptocurrency news outlet. Anything from a celebrity tweet to new federal regulation can send prices spiraling. 

“If Elon Musk puts hashtag Bitcoin in his Twitter bio, it sends Bitcoin up 10%,” says Leech. 

This unpredictability is part of the reason why investing experts warn against investing huge amounts of your portfolio into a risky asset like crypto. Many recommend keeping your crypto holdings to less than 5% of your total portfolio. 

For new investors, day-to-day swings can seem frightening. But if you’ve invested with a buy-and-hold strategy, dips are nothing to panic about, says Humphrey Yang the personal finance expert behind Humphrey Talks. Yang recommends a simple solution: don’t look at your investment. 

“Don’t check on it. That’s the best thing you can do. If you let your emotions get too much into it then you might sell at the wrong time, make the wrong decision,” says Yang.

This is the traditional “set it and forget it” advice that many traditional long-term investors follow. If you can’t get on board, and the extreme dips continue to cause you worry, then you might have too much riding on your cryptocurrency investments. 

“The most important thing any investor can do, whether they are investing in Bitcoin or stocks, is not just to have a plan in place, but to also have a plan they can stick with,” says Douglas Boneparth, a CFP and the president of Bone Fide Wealth. “While buying the dip might be attractive, especially with an asset that you really like, it might not always be the best idea at the moment.”

Other Recent Crypto NewsThe Federal Reserve Chairman says U.S. might need more crypto regulation, but long-term HODLers of big coins like Ethereum and Bitcoin probably don’t need to worry about changing their strategy, experts say. Major cryptocurrency exchange Binance is no longer authorized to operate in Italy, according to a statement from Italian regulators. The move shows how easily new national regulations can impact current cryptocurrency infrastructure. 

Square Inc. announced it’s building a new decentralized finance unit using Bitcoin, according to CEO Jack Dorsey’s tweets. This is the latest example of a big player investing in the potential of blockchain and cryptocurrency.

Read More:Fed Chairman Says U.S. Might Need More Crypto Regulation. Here’s What That Means for InvestorsBitcoin Dropped Below $30,000. Here’s What Investors Can Learn From the Continued VolatilityThe Price of Bitcoin Continues to Fall. Here’s What It Means for Investors, According to ExpertsHow to Buy Bitcoin: A Guide for New Crypto InvestorsCurious About Crypto? What 10 Financial Advisors Are Telling Clients About Investing in ItWhat is Bitcoin – The First Cryptocurrency

Cryptocurrency is a highly volatile, speculative investment. Only invest in crypto what you’re prepared to lose, and make sure you have other financial priorities in place first: save money in an emergency fund, contribute to retirement savings, and pay off any high-interest debt balances.

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In what appears to be a first for the American government, the U.S. Department of State is offering to pay a cryptocurrency bounty worth up to $10m (315BTC at the time of writing) in return for actionable intelligence about cyberattacks orchestrated by foreign governments.

The federal agency, acting through the Rewards for Justice program operated by the Diplomatic Security Service, made the offer in a July 15th press statement.

It said the payment would be provided to anyone who can give “information leading to the identification or location of any person who, while acting at the direction or under the control of a foreign government, participates in malicious cyber activities against U.S. critical infrastructure”.

The press statement then added: “Reward payments may include payments in cryptocurrency.”

An agency spokesperson confirmed to a taken-aback Coindesk that this does, indeed, mark “the first time since its establishment in 1984 that the Rewards for Justice program has offered a reward payment in cryptocurrency”.

More significantly, it appears to be the first time that any organ of the U.S. federal government has taken the plunge. Most-wanted lists with cash rewards are also maintained by the Federal Bureau of Investigation (FBI) and the U.S. Immigration and Customs Enforcement (ICE) agency, but to date neither body has publicly offered to make payments in cryptocurrency (including when the fugitive is wanted in connection with crimes related to cryptocurrency).

For bitcoin enthusiasts, the news may be seen as an admission by the U.S. government that decentralized cryptocurrencies are a viable means of conducting state business.

That’s probably reading too much into it. In order to be eligible for the $10m reward, you would almost certainly need to be a Russian or Chinese hacker who is willing to commit treason by passing intelligence about your activities and chain of command to a hostile Western government.

The U.S. Diplomatic Security Service will be acutely aware that anyone engaging with its Rewards for Justice program is putting their life at risk, so the decision to offer payments in cryptocurrency appears to be largely pragmatic. Most cryptocurrencies are transacted over public blockchain networks that offer more anonymity and less traceability than traditional payment channels.

Informants have also been asked to initiate contact via an anonymized Tor channel on the Dark Web–not exactly routine government protocol.

Nonetheless, it is of historical significance that the U.S. federal government is now offering to pay for services–funded by taxpayer dollars–with cryptocurrencies that exist outside the influence of central banks and other state institutions.

That should lay to rest any lingering doubts some people have about the security of bitcoin, which is cryptographically unbreakable and can only be seized when stored improperly by entrusting it to third parties.

If adopted as broader government policy, the approach should also result in a healthy up-tick in intelligence tip-offs.

Earlier this month, a coordinated ransomware attack originating in Russia disrupted the operations of more than 1,000 companies using IT infrastructure provided by U.S. firm Kaseya. Cybercrime costs the global economy more than $1tr per year–about 1% of global GDP–according to software security firm McAfee.

I am an aviation journalist turned crypto reporter whose work has appeared in The Guardian, The Economist, The New York Times, Flightglobal, African Business, Al Arabiya

I am an aviation journalist turned crypto reporter whose work has appeared in The Guardian, The Economist, The New York Times, Flightglobal, African Business, Al Arabiya & New Eastern Europe. I first became interested in bitcoin in 2013, but only changed career in 2021 after realizing the network's true potential to democratize finance–particularly in the developing world. My work exposes and debunks the endemic misinformation spread about bitcoin by mainstream media outlets, multinational organizations and legacy financial institutions. I also cover technical analysis and corporate adoption of blockchain technology. I believe bitcoin is humanity's best weapon in the fight against inequality. (Financial disclosure: I currently have bitcoin & Ampleforth holdings.)

By Richard Eisenberg, Next Avenue Editor

Until now, we've never published a Next Avenue article about cryptocurrency or Bitcoin or the blockchain and, as the editor of our Money channel, I'm the reason why.

Frankly, I've felt that the Bitcoin digital currency and other cryptocurrencies were, at best, extremely volatile and risky investments (did I mention the price of a Bitcoin coin went from $10,764 in September 2020 to $64,829 in April 2021 and is now down to $40,000?) and, at worst, sometimes sketchy. I figured the cryptocurrency craze would fade. I was wrong about that last part.

So, here are the basics on the blockchain and Bitcoin and how to invest (just a little!) in cryptocurrencies, pulled from the new episode of the "Friends Talk Money" podcast I co-host with personal finance writer Terry Savage and public media's MoneyTrack host and Wealthramp.com founder Pam Krueger. (You can download the podcast from your favorite podcast distributor.)

Fact is, lots of smart financial analysts — like Ark Invest's Cathie Wood — have become big believers in cryptocurrency.

Some have come around to become, if not crypto fans, then at least no longer deniers. In 2018, legendary investor Warren Buffett called Bitcoin "probably rat poison squared." But his company recently put $500 million into Nubank, the parent company of the digital bank selling cryptocurrency products.

And why should you care about Bitcoin and the blockchain?

Well, the GlobalData analytics company just predicted that revenue from blockchain platforms and services will soar from $4 billion in 2020 to $199 billion by 2030. According to a survey by Motley Fool's service The Ascent, 21 million Americans — 14% of adults — own Bitcoin, which has been around since 2009; half of them bought it during the last 12 months. And, for what it's worth, El Salvador just became the first country to adopt Bitcoin as legal tender, and the payment app Venmo now lets customers buy or sell cryptocurrencies.

"I see the blockchain technology on which cryptocurrency is built as being transformative," Krueger said on the podcast. Some compare the impact of Bitcoin on the financial world with the way the internet disrupted music and publishing.

Krueger said that a year ago, when she asked Wealthramp's 250 fee-only advisers whether they'd recommend clients invest in cryptocurrencies, "almost all of them said, 'Not yet.'" But she surveyed them in June 2021 "and I would say that there's a shift in the mindset of the whole group." In other words, they now think their clients should consider owning a little crypto if they're interested.

For a primer on all this, let me try to make crypto less cryptic by offering a few questions that may be on your mind and answers to them.

What is the blockchain, what is Bitcoin and what is cryptocurrency?

Here's how Savage explained them on the "Friends Talk Money" podcast:

"The blockchain ledger is a computer program. Think of it as the behind-the-scenes backbone where all [financial] transactions are securely recorded without any intermediaries in a ledger that every participant can see, but no one can change unless by an authorized transaction recorded on this blockchain," said Savage.

Savage conceded that definition might sound "clear as mud," so she offered an analogy that might help.

"When you buy a house, you get title insurance to make sure that no one else has filed a claim to the property. And that's why we have title insurance companies and we pay a fee to them," Savage noted. "But if all the title changes were recorded on the blockchain, there would be no need for this insurance or for the title insurance companies… The registration would be immutable and visible on the blockchain ledger."

With the blockchain's peer-to-peer transactions, she said, you don't need a financial intermediary, a bank, a currency exchange or even a government. "Think about the implications of that kind of medium of exchange," said Savage.

And what does this have to do with Bitcoin, Dogecoin (a meme-inspired crypto), Ethereum (billionaire investor and "Shark Tank" star Mark Cuban is a fan) and other cryptocurrencies?

Savage said: "You could use this blockchain ledger technology as a basis for all kinds of completely secure transactions, like property transactions. But the most popular use is with the so-called cryptocurrencies like Bitcoin." Bitcoin records transactions in the blockchain.

There are thousands of other cryptocurrencies, Savage added, but "many of those are started by complete scammers." Consumers lost almost $82 million in crypto scams during the fourth quarter of 2020 and the first quarter of 2021, according to the Federal Trade Commission.

So, how do you buy cryptocurrencies — if you dare?

Savage's first rule: "If you're going to buy a cryptocurrency, stick with the best-known ones [like Bitcoin]. That doesn't mean you won't lose money on the price fluctuations, but it means you're not just throwing your money into a black hole."

And that led to another of Savage's rules: Buy cryptocurrency on a legitimate crypto exchange like Coinbase or Kraken, or through an ATM that sells it — though ATM fees to do so are steep. (Coinbase isn't that machine in supermarkets where you exchange your loose change for bills, I joked on the podcast; that's Coinstar.)

Alternatively, you could invest in a blockchain Exchange Traded Fund (ETF) that either invests in companies involved in blockchain technology or invests in futures or options pegged to the performance of cryptocurrencies like Bitcoin or crypto investment products from asset managers.

Is buying Bitcoin investing or speculating?

It's a speculation, since there's no intrinsic correct value for it. Bitcoin is worth what people decide it's worth each day.

But there seems to be strong long-term potential for a rise in Bitcoin's value, since businesses like banks, Microsoft MSFT and Tesla TSLA accept it (CEO Elon Musk's musings on Bitcoin often lead to wild fluctuations) and it looks like more will, over time. And, as Savage noted, the Federal Reserve is studying developing a digital currency.

How big a portion of my investment portfolio should I put into Bitcoin or other cryptocurrencies or businesses related to them?

Here's what Kraken.com Chief Product Officer Jeremy Wells told the "Friends Talk Money" hosts: "I just generally encourage everyone to kind of explore the space a little bit. There's no need to put an entire paycheck into cryptocurrency."

So, the "Friends Talk Money" co-hosts said, maybe you might put 3% of your total portfolio into crypto; maybe less. I'm starting to think of it as a new way to diversify your investment portfolio, the way you might do with your stocks by buying international stocks of companies in countries with emerging economies.

Incidentally, you don't have to buy an entire Bitcoin. Crypto exchanges let you purchase a fraction — even as little as $5 or $10 worth.

But think of this type of investment as money you can lose — and very well might. Mad money meet mad crypto.

Dennis Chookazian, a futurist and longtime cryptocurrency analyst, told "Friends Talk Money" that Bitcoin and its ilk are "entertainment assets" that provide "psychic income."

His advice: "You shouldn't buy it with any money that you need for your children's education or something like that…You should not buy cryptocurrencies with money that you absolutely can't afford to lose."

Krueger calls investing in cryptocurrencies "emotional gambling," adding that "anytime you put money into something based on your emotions, it's the fastest way to lose money."

But, she noted, "it's kind of fun to learn about." And, Krueger said, she owns some Bitcoin and digital tokens Ethereum and Cardano.

Next Avenue is public media’s first and only national journalism service for America’s booming older population. Our daily content delivers vital ideas, context and

Next Avenue is public media’s first and only national journalism service for America’s booming older population. Our daily content delivers vital ideas, context and perspectives on issues that matter most as we age.

Investors are more interested than ever in cryptocurrency. Criminals are too.

Reports of cryptocurrency crimes have increased 312% per year on average since 2016, according to a report from Crypto Head, a cryptocurrency news outlet that used Federal Trade Commission data to analyze cryptocurrency crime trends in recent years. These crimes can include everything from hackers stealing investors’ coins to people falling for scams related to crypto investing.

A cold wallet — an offline device not connected to the internet— is the safest place to keep your crypto investment, according to experts.

Bitcoin has the most crime reports of any cryptocurrency, which makes sense since it’s also the oldest and most-widely held crypto. Beyond digital crimes, Bitcoin’s safety as an investment is often questioned thanks to the frequency and scale of its value fluctuations.

Despite an increase in fraud and theft, many experts tout the safety of Bitcoin investments — at least in terms of cybersecurity if not investment stability — thanks to secure blockchain technology. So, is investing in Bitcoin safe? Here’s what you need to know about Bitcoin’s safety as an asset and keeping your cryptocurrency secure if you invest.What to Consider Before Buying Bitcoin

First things first: The money you put into Bitcoin is not safe from value fluctuations.

Bitcoin is a volatile investment. If you’re looking for a “safe” investment with guaranteed returns, then don’t invest in Bitcoin — or any cryptocurrencies for that matter. Just over the past few months, the price of one Bitcoin has fluctuated between $30,000 and $60,000. Bitcoin isn’t the only volatile cryptocurrency, and other, smaller coins may be even riskier. 

“Understand that these are very volatile investments, so if big fluctuations cause you to lose sleep, this isn’t the space for you,” says Dan Herron, a CFP with Elemental Wealth Advisors in San Luis Obispo, California.

Experts recommend keeping any cryptocurrency investments to less than 5% of your portfolio for exactly that reason — and to make sure you’ve got a solid conventional retirement investment plan in the first place. It’s also recommended you have an emergency fund and pay down any high-interest debts before you put any money into Bitcoin or any other cryptocurrency.

(Read More: Here’s How Much of Your Investing Portfolio Should Be in Crypto, According to 5 Experts)

What Are the Risks Associated With Bitcoin?

The biggest security concern for many people when it comes to Bitcoin investing — like any other digital activity — is the risk of hacking and fraud. Cryptocurrency crimes are on the rise, according to data from the Federal Trade Commission, and resulted in a median loss of $1,900 per report between October 2020 and March 2021.

Often, reported crypto crimes involve scammers requesting payment in cryptocurrency, or sending unsolicited offers to help you make money or increase your holdings, according to the FTC. “One sure sign of a scam is anyone who says you have to pay by cryptocurrency,” the agency says. You should also avoid any unsolicited offers related to crypto; do your own research and buy your coins yourself using a reputable crypto exchange. Other types of scams to look out for

Initial coin offerings (ICOs) for fake cryptocurrencies

When a cryptocurrency is offered to investors before it’s launched to the market, it’s called an ICO (similar to a new stock’s IPO). But sometimes these new coin offerings can be fabricated, leading investors to put their money in a cryptocurrency that doesn’t actually exist. 

Always research any cryptocurrency before you invest. If it looks too good to be true, it probably is. Read the project’s white paper and check out the founders as part of your research. For most investors — and especially beginners — it’s smart to stick to established, popular coins like Bitcoin or Ethereum.

Crypto pump and dump schemes 

A small group of investors may pump a lot of money into a specific crypto, falsely inflating the price while convincing private investors to also invest. Then the original investors sell their shares for a profit before the price falls again. This type of scheme exists for more traditional investments, too.

Again, if an investment seems too good to be true, it probably is. Watch out for coins that have risen a lot in value without any clear reason why, the Crypto Head report recommends. This may be a sign of a pump and dump scheme.

How to Keep Your Bitcoin Safe

Hackers can gain access to individuals’ crypto wallets or breach entire cryptocurrency exchanges to steal their holdings. That’s why it’s essential to store your crypto in a safe place, and practice good digital security habits.

Cryptocurrency exchanges and third parties offer storage for your coins through hot wallets, which are secure, but still online (and therefore still susceptible to hacking). Crypto held on an exchange or in a wallet is not FDIC-insured like money in the bank. Make sure you trade and hold your crypto on a platform that offers robust security measures — including keeping a significant amount of holdings in its own cold storage and two-factor authentication for users. Some exchanges may even have private insurance policies in case of theft or hacking.

For the best protection against online fraud, many experts recommend cold storage through an offline device not connected to the internet, similar to a USB drive. But even cold storage comes with risks, like the possibility of losing access to your investment completely if you forget your password. 

(READ MORE: A Crypto Wallet Can Help Keep Your Coins Safe. Here’s How to Decide If You Need One)

Bitcoin Security vs. Privacy 

While you can take measures to secure your crypto holdings from hacking and theft, Bitcoin may not be any more effective at keeping your personal information private than any other traditional investment. 

“Security and privacy are two separate topics,” says Kiana Danial, author of “Cryptocurrency Investing for Dummies” and the personality behind @Investdiva on Instagram.

While trades you make in Bitcoin may be harder to trace than credit card purchases or direct bank withdrawals, Bitcoin transactions are not private. Bitcoin trades are tied to a hash code — a string of letters and numbers —  that are unique to you, says Ollie Leech, learn editor at CoinDesk, a leading cryptocurrency news outlet.  

“You’re really not anonymous, more like pseudonymous,” says Galen Moore, director of data and indexes at CoinDesk. While your activity isn’t directly tied to personal details like your social security number, the blockchain is public and there are ways that people can identify you.  

But even though Bitcoin transactions aren’t private, that doesn’t mean every user can see exactly how much everyone else has bought or sold. 

“In order to download the Bitcoin blockchain you would need massive, massive, computing capacity, like a supercomputer,” says Danial. “The day-to-day average Joe can’t go in and see what transactions are happening in the Bitcoin blockchain.” 

If you want total privacy when you transact, then neither Bitcoin nor Ethereum — the second largest cryptocurrency by market capitalization — are for you. Other smaller cryptocurrencies are designed for this total privacy, though experts recommend avoiding these lesser known cryptos as an investment.

(READ MORE: Ethereum: What You Should Know Before You Invest)

“With Bitcoin and Ethereum, all those transaction details being open is part of how the network is maintained as people watch,” says Moore. The open system helps the blockchain retain accountability. 

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Though they're soaring Wednesday, the world's largest cryptocurrencies are still far from their peaks earlier this year as a result of heightened regulatory scrutiny in China and bearish comments from Tesla chief Elon Musk—here's when every top 10 cryptocurrency (save for Tether and USD Coin, whose values are meant to float near $1) peaked this year. 

Anticipation over crypto-brokerage Coinbase's public-market debut helped lift bitcoin to new highs in April, but after the occasion—hailed as a watershed moment for institutional adoption—failed to meet high expectations, the world's largest cryptocurrency struggled to hold on to its meteoric gains.

Amid crypto-mining bans in China and criticism over the coin's massive carbon footprint, bitcoin prices have plummeted nearly 47% from their all-time high on April 14, the day Coinbase debuted on the Nasdaq exchange.

Though Ripple's XRP hasn't surpassed its high from the crypto-trading frenzy four years ago, the volatile token's peak this year also occured on April 14—buoyed by both Coinbase's listing and a judge's favorable ruling in the Securities and Exchange Commission's ongoing Ripple investigation—but its price has plummeted a staggering 65% since.

As investors sold off their bitcoin holdings in the weeks after its peak, many plowed into other top cryptocurrencies, lifting the likes of ether, polkadot, uniswap and binance coin to new highs in early May, as big banks Goldman Sachs and Morgan Stanley started revving up operations in the space.

Some cryptocurrencies also got a boost from billionaire Elon Musk—including his unabashed favorite, "joke" token dogecoin, which surged to a new high on May 8, the day of Musk's highly anticipated Saturday Night Live debut, but has plunged nearly 70% since the self-proclaimed "dogefather" used his airtime to call the digital asset a "hustle."

After days of surging while the broader crypto market started crashing over environmental concerns, Cardano's ada token, which claims to have a much less carbon-intensive mining process than bitcoin, peaked on May 15 and has fallen nearly 45% since, much like the rest of the crypto-market.

Bitcoin and the broader cryptocurrency market soared during the pandemic in light of inflationary concerns and soaring institutional adoption, but prices have plummeted since April, when Tesla—one of bitcoin's biggest corporate investors—disclosed it sold a large chunk of its holdings. Musk, who cheered on the crypto market during its massive rally earlier this year, helped intensify crypto's crash last month by tweeting out that Tesla would no longer accept bitcoin because of its hefty environmental cost—a single development that wiped out more than $300 billion in crypto market value in just hours. Markets have failed to recover since then amid an intensifying regulatory crackdown in China, and the value of the world's cryptocurrencies—at less than $1.4 trillion Wednesday—is roughly half of the nearly $2.6 trillion at its peak on May 12.

“The fall that has taken place since [Musk first soured on crypto] shows just how wild an instrument bitcoin is, how overbought it has become and how influential the Tesla CEO now is in the space,” Oanda Senior Market Analyst Craig Erlam said in a recent note. “I’m not sure any of that is a good thing.”

Regulation. Experts have long warned that heightened government intervention could stunt the crypto market’s massive rally, and the recent mining crackdown in China has proven that. Still, the last time regulatory concerns crashed the market—by more than 80% in 2018—prices managed to bounce back. The market is still up about 50% from its early 2018 peak.  

Major Cryptocurrencies—Including Bitcoin, Ethereum, Dogecoin—Plummet As China Widens Crackdown (Forbes)

Crypto Crash Intensifies As Losses Eclipse $1.3 Trillion Just Two Weeks After Market's All-Time High (Forbes)

Crypto Markets Crash Again After DOJ Seizes $2.3 Million Bitcoin Ransom (Forbes)

I'm a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism

I'm a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism and economics while working for UNC's Kenan-Flagler Business School as a marketing and communications assistant. Before Forbes, I spent a summer reporting on the L.A. private sector for Los Angeles Business Journal and wrote about publicly traded North Carolina companies for NC Business News Wire. Reach out at jponciano@forbes.com. And follow me on Twitter @Jon_Ponciano

Fidelity Digital Assets is planning to increase headcount by about 70 percent as demand for cryptocurrency services from institutional investors remains strong.

The unit of the Boston-based asset manager Fidelity Investments Inc. plans to add about 100 workers in technology and operations in Dublin, Boston, and Salt Lake City, said Tom Jessop, president of Fidelity Digital Assets. They will help the business develop products and expand into cryptocurrencies besides bitcoin, he said.

Last year “was a real breakthrough year for the space, given the interest in bitcoin that accelerated when the pandemic started,” Jessop said. Bitcoin hit a record above $63,000 earlier this year, with other cryptocurrencies including ether also rising to all-time highs before falling by about half in recent weeks. So far, Fidelity Digital offers only custody, trading, and other services for bitcoin.

“We’ve seen more interest in ether, so we want to be ahead of that demand,” Jessop said.

Fidelity Digital will also push to offer trading during more of the week, he said. Crypto trades all day every day, unlike most financial markets, which close in the afternoon and on weekends. “We want to be at a place where it’s full time for most of the week,” he said.

As cryptocurrency and decentralized finance gain more acceptance, money has been pouring into the space to fund startups and new ways of conducting traditional financial transactions.

Venture capital funds have already committed more than $17 billion this year to blockchain-based projects, according to data provider PitchBook. That’s by far the most in any single year and almost equal to the total amount raised in all previous years combined. Firms raising money include Chainalysis, Blockdaemon, Coin Metrics, Paxos Trust Co., Alchemy, and Digital Asset Holdings LLC.

Beyond holding and trading in Bitcoin, Fidelity Digital allows its institutional customers to pledge Bitcoin as collateral against cash loans in a partnership with blockchain startup BlockFi Inc.

Institutional investor demand to get access to Bitcoin, Ether, and other digital currencies is only rising, Jessop said. The first clients of Fidelity Digital tended to be family offices and hedge funds, he said. That’s now expanding to retirement advisers and corporations that want to hold crypto as an asset class.

“Bitcoin has been the entry for a lot of institutions,” Jessop said. “It’s now really opening up a window on what else is going on in the space.” A big shift is in “the diversity of interest” from new and existing customers, he said.

Suze Orman approves of your Bitcoin investment – with a couple conditions.

“I think it should be a part of your portfolio as long as you can afford to lose that money and you’re going to keep it for a seriously long period of time,” Orman recently told us during a NextAdvisor interview in celebration of Pride Month. 

The personal finance icon also revealed the exact size of her stake in Bitcoin: $5,000 as of the time of our interview. 

Orman also told us how she bought it: “I do it through PayPal, because it was just easy to do it,” she said, noting how complicated some of the cryptocurrency exchanges seemed to her — not to mention the prospect of whether she needed a crypto wallet too (something she has no interest in).

Despite the consistent crypto market volatility and other unknowns about potential future regulation and cybersecurity concerns, Orman has an optimistic outlook. “Even with all of that said, I am still a fan of Bitcoin,” Orman said.

How to Invest In Bitcoin, or Other Cryptos

Experts recommend sticking to the most popular cryptocurrencies like Bitcoin and Ethereum. And that’s only if it won’t get in the way of other financial priorities like saving for emergencies, paying down high-interest debt, and investing in a conventional retirement saving plan.

You should consider crypto a high-risk asset class within your portfolio, and many experts say it shouldn’t exceed more than 5% of your portfolio. The value of Bitcoin and any crypto can fluctuate wildly by the day and even the hour — so you should be comfortable with the volatility and uncertainty that comes with it. 

Orman has an even simpler way to determine how much of your portfolio should be comprised of crypto assets: “It depends on how much money are you willing to lose, in my opinion.”

Like other personal finance experts, Orman likens Bitcoin to gold as a long-term investment and store of value. Still, cryptocurrency is a new and emerging asset class, with more uncertainty than predictability at this point. “I would view it as a seriously speculative investment at this point in time,” Orman said.

But if you are in position to devote a portion of your investment portfolio to Bitcoin, Orman says to treat it like any investment and take a long-term approach. Forget meme stocks and other get-rich-quick investment gambits, and go in for the long haul, she says. 

And just like she advises with more conventional index funds, Orman recommends a dollar cost averaging strategy with Bitcoin. In other words, determine how much you are comfortable investing and spread it out throughout the year, making smaller, incremental deposits adding up to the total you’d like to invest.

As for what the future holds for Bitcoin and other cryptocurrencies? Uncertain as it may be, Orman sees an upside worth taking a chance on. “I don’t plan to sell even my little amount, no matter what,” Orman said.

How Bitcoin Compares to Index Funds

Index funds have been around for nearly 50 years. Bitcoin, the first cryptocurrency, has been around for a little over 10 years. 

With decades of steady growth behind them, index funds offer a predictable method of building wealth over the long term. While some people have struck gold with Bitcoin, countless others have lost everything. As such a young asset class, Bitcoin is both far less predictable and much more volatile.

Financial experts, with Orman among them, have long touted the benefits of index funds – low-cost portfolio investments that allow you to purchase shares of a wide swath of companies representing a section of the stock market. “In the index funds, eventually you are going to make money no matter what,” Orman said. “You’re going to be just fine as long as you have at least 5, 10, 15 years until you need this money, preferably longer.”

That’s quite a contrast to Orman’s advice that any Bitcoin investment should come with the knowledge and preparedness that you could lose it all.

What Does the Future Hold For Crypto?

Nobody knows for sure what the future holds for cryptocurrency, but many finance experts have seen enough to believe it could be around for many years. If nothing else, experts say the underlying blockchain technology that powers cryptocurrencies could drive transformational innovation in finance and beyond.

But plenty could still go very wrong from the investor’s point of view. 

Orman pointed to the recent Colonial Pipeline hack and Bitcoin-paid ransom as an example of what could hold Bitcoin back. If criminals increasingly rely on Bitcoin payments to hold people, organizations, and even governments ransom, Orman says, it’s difficult to imagine the U.S. government wouldn’t take action to “really clamp down on Bitcoin.”

The U.S. Federal Reserve is also researching the prospect of a national digital currency – the effects of which on Bitcoin and other cryptocurrencies is unknown. But for an investment class that’s still in its relative infancy, the influence of more robust government regulation could be significant.

Another thing Orman doesn’t like about Bitcoin is how susceptible it is to the influence of celebrity Twitter accounts – Tesla CEO Elon Musk has repeatedly shown his ability to move markets with as little as a tweet or a Saturday Night Live appearance.

Along with Orman’s concerns about potential future U.S. crypto regulation, this “other thing I’m not liking is that it’s as if one person comes out and makes a comment, it goes up,” she said. “And then it goes down, and then it does this, and then it does that.”

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Robin is the Founder and CEO of Koinly (a bitcoin and cryptocurrency tax software) that helps Bitcoin investors calculate their taxes.

With cryptocurrencies becoming increasingly popular throughout the world, some employers are now paying their employees with cryptocurrencies like bitcoin or ether. While the crypto sector itself has been paying out salaries in digital currencies for years (Coinbase was paying employee salaries in crypto as far as back as 2013), crypto payments are becoming more mainstream. 

For instance, the Japanese firm GMO Internet Group decided to offer its employees the option to receive their salaries in crypto. In fact, today there are platforms that actually enable employers to make salary payments in crypto. 

Freelancing is another area in which I'm seeing crypto payments more frequently, especially when it comes to international payments. Remote workers all over the world, whether they’re programmers, designers or content marketers, are receiving compensation through cryptocurrencies. Existing options can become very expensive, and bitcoin or ether payments are a relatively easy and cost-effective alternative. 

Know the advantages and complications.

There are some things you need to keep in mind if you're getting paid in crypto. There are some natural advantages of receiving a part of your income in crypto. This includes things like efficient and cost-effective transfers (especially for international payments), financial liberation from the traditional centralized financial system, and strong identity protection. 

At the same time, there are some potential complications that you should keep in mind. For starters, it’s important to remember that cryptocurrencies can be quite volatile, and if their value depreciates sharply, your net worth may be affected. So it may be a good idea to make sure you're only receiving a part of your salary in crypto or to consider selling some part of it immediately upon receiving it. On the other hand, you might choose to hold onto the currency if you know about crypto trading and are expecting your crypto assets to appreciate.

Understand how the taxes work.

If you're receiving your salary in crypto, you also need to be aware of the tax implications and file your returns accordingly. To put it simply, say you’re a freelancer who wants to receive a payment worth $1,000 from a client in bitcoin. On the day of the payment, if the value of the bitcoin is $10,000, you will end up receiving 0.1 bitcoin. 

When it comes to taxation, the IRS states that you will need to determine the difference between your adjusted basis and how much you sell it for; you should report this number on your taxes when you sell the currency. Many people are unclear on how crypto taxes work and end up not declaring crypto income. However, the IRS is calling for stricter compliance with cryptocurrency requirements. So if you haven’t been declaring your crypto income, it’s about time you started doing so. You can even file amended returns for the income you’ve received in the past. 

One of the challenges with filing these returns is that you may not always remember the fair market value of the crypto you received. Uploading your data into a crypto tax software can help you figure out the value of the crypto and file your returns accordingly. 

Don’t forget capital gains tax, either.

If you think your tax returns are sorted once you declare the cryptocurrency income you received, think again. As far as the IRS is concerned, bitcoin and other cryptocurrencies fall into the category of “property.” This basically means that when you sell cryptocurrencies, you have to pay capital gains on any profit that you make. 

If you have held the crypto for less than a year, you’ll have to pay short-term capital gains tax on the profits. This profit gets added to your total taxable income, and the amount you have to pay in taxes will depend on the tax bracket you belong to. If you hold crypto for more than a year, you’ll end up paying long-term capital gains tax, which can amount to as much as 20% of the profit.

Write off your capital losses.

Don’t forget that if you sell crypto at a loss, you can write off your losses to reduce your taxable income and therefore your tax burden. So don’t forget to keep an account of your losses and include them when you file your returns.

Receiving a part of your income in cryptocurrency can feel extremely liberating, as well as efficient and cost-effective. However, do stay on top of your taxes to avoid unnecessary stress later.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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Robin is the Founder and CEO of Koinly (a bitcoin and cryptocurrency tax software) that helps Bitcoin investors calculate their taxes. Read Robin Singh's full executive

Robin is the Founder and CEO of Koinly (a bitcoin and cryptocurrency tax software) that helps Bitcoin investors calculate their taxes. Read Robin Singh's full executive profile here.

Bitcoin and cryptocurrency prices have struggled this week with the crypto market's combined value slipping under $1.5 trillion—down from $2.5 trillion in May.

The bitcoin price, after getting an unexpected boost from Tesla billionaire Elon Musk last weekend, has resumed its decline over the last few days, falling back toward $30,000 per bitcoin.

Now, as bitcoin charts show the price 50-day moving average has fallen below the 200-day moving average—a pattern known as the "death cross"—Coinbase cofounder Fred Ehrsam has warned "most" cryptocurrencies and crypto-assets "won't work" and "90% of NFTs" will have "little to no value in three to five years."

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Bitcoin's "death cross," despite its ominous name, appears to be a lagging price indicator. The last time the trading pattern occurred in March 2020, it heralded a huge bitcoin bull run that helped even smaller cryptocurrencies surge to all-time highs.

"People are going to try all sorts of things," Ehrsam, who has gone on to found the blockchain investment firm Paradigm since leaving Coinbase in 2017, told Bloomberg this week, warning many of those smaller cryptocurrencies won't survive. "There'll be millions and millions of cryptocurrencies and crypto-assets, just like there were millions and millions of websites. Most of them won't work."

Coinbase, the San Francisco-based bitcoin and cryptocurrency exchange, went public this year at a huge $100 billion valuation but has since seen its market cap plummet, falling by a third amid waning interest among retail traders and global regulatory pressure.

Since bitcoin was created in 2009, thousands of cryptocurrencies have been created with crypto data provider CoinMarketCap currently counting just over 10,000 different coins.

Some, such as ethereum, the second-largest cryptocurrency after bitcoin with a market capitalization of $250 billion compared to bitcoin's $660 billion, have established themselves as cryptocurrency mainstays—while others including EOS and, more recently internet computer, have made splashy debuts only to fade away over time.

Internet computer's ICP token is down over 90% from its all-time high price set shortly after its launch in May, while EOS, which made headlines when it raised $4.1 billion ahead of its launch in 2018, is trading 80% lower.

Ehrsam also warned against investors betting on NFTs (non-fungible tokens). The popularity of NFTs, that use cryptocurrency technology to allow all manner of digital real estate from artwork to tweets, memes and YouTube videos, to be tokenized and sold via a blockchain, has exploded over the last few months—though data suggests the market is already significantly down on its early-May peak.

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"I'd go so far as to say that 90% of NFTs produced, they probably will have little to no value in three to five years," said Ehrsam, comparing the recent NFT craze to "early internet companies in the late '90s" when many Silicon Valley startups suddenly emerged with eye-popping valuations only to disappear entirely in the following months and years.

In March, at what may have been the height of NFT mania, the digital artist known as Beeple sold an NFT of his work for a mind-numbing $69 million, making him "among the top three most valuable living artists," according to the auction house Christie’s.

However, despite the peaks and troughs of the bubbly crypto market, Ehrsam remains convinced bitcoin and cryptocurrencies are here to stay.

"I think crypto is the next internet-sized opportunity for the United States," he said, predicting that the complaints leveled at bitcoin that it is too energy inefficient from the likes of Tesla's Elon Musk and billionaire philanthropist Bill Gates will be dispelled eventually. "The world doesn't change overnight, but you can see the seeds of exponential growth occurring already."

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com. Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.

CareerBuilder CEO Irina Novoselsky suggests people are finding a 'side hustle' in cryptocurrency trading, which is keeping them from returning to work.

Security researchers have identified over 170 Android apps scamming cryptocurrency miners.

The apps have been designed solely to steal money from people who mine cryptocurrencies, said security researchers at Lookout Threat Lab, a cloud security company. 

The apps scammed more than 93,000 people and stole at least $350,000 between users paying for apps and buying additional fake upgrades and services, the researchers said, who classified apps into two families that they dubbed "BitScam" and "CloudScam."

Security researchers have identified over 170 Android apps scamming cryptocurrency miners. (iStock)

"What enabled [these apps] to fly under the radar is that they don’t do anything actually malicious. In fact, they hardly do anything at all. They are simply shells to collect money for services that don’t exist," the researchers said in a report.

And the evolution of crypto mining makes scamming easier.

Cryptocurrency mining taps computer processing power to solve complex mathematical problems that verify cryptocurrency transactions. Miners are then typically rewarded with a small amount of cryptocurrency.

BITCOIN MINING OPERATION IN FINGER LAKES SPARKS LOCAL CONCERNS

Broadly, there are two mining strategies. One is mining pools, where individuals can contribute computing power in order to get cryptocurrency. Cloud mining is the evolution of mining pools. In this case, cloud miners rent cloud computing power – similar to cloud computing.

"Cloud mining introduces both convenience and cybersecurity risks. Because of the simplicity and agility of cloud computing, it is quick and easy to set up a realistic-looking crypto mining service that is really a scam," the researchers said.

The majority of fraudulent apps were paid, allowing the scammers to pocket the money from app sales. The apps also offered subscriptions and services that users could pay for via the Google Play in-app billing system.

After logging in, a user would see an activity dashboard that displays the available hash mining rate – the amount of computing power being contributed to the network through mining – as well as how many coins they have "earned." The hash rate would typically be very low in order to get users to buy upgrades that promise faster mining rates.

"After analyzing the code and network traffic, we discovered the apps display a fictitious coin balance and not the number of coins mined. The value displayed is simply a counter slowly incremented in the app," the researchers said.

In the BitScam-style scam, users are given the option to buy "virtual hardware" to increase the rate of mining. The cost of virtual hardware ranges from $12.99 - $259.99 and can be purchased either through Google Play or via Bitcoin and/or Ethereum.

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Apps were also designed so that users were not "allowed" to withdraw any coins until they reached a minimum balance. And even when a minimum balance was reached, users were not able to withdraw coins, the researchers said.

"The app would display a message telling the user that the withdrawal transaction is pending, but behind the scenes, it simply resets the user’s coin balance amount to zero without transferring any money to the user."

While the apps have now been removed from Google Play, there are dozens more still being circulated in third-party app stores, the researchers said.

"The scammers running this scheme were able to tap into the existing frenzy created by the hot cryptocurrency market," according to the report.

Bitcoin prices have crashed from levels of around $62,000 in mid-April to just about $33,000 as of Tuesday. The sell-off has been driven by multiple factors including China’s crackdown on Bitcoin trading and mining and Tesla’s surprise reversal of its decision on accepting the digital currency as payment for its cars. There have been concerns over the security of the cryptocurrency after U.S. officials were able to recover most of the Bitcoin ransom paid to hackers that targeted the Colonial Pipeline. Moreover, with inflation and bond yields expected to trend higher, money is moving back to real-economy sectors and away from non-productive assets such as cryptocurrency.

Now, although the market sentiment for cryptos, in general, is bearish, cryptocurrencies appear to be here to stay as an asset class. While the asset itself is volatile and prone to boom and bust cycles (we are likely in the fourth asset price cycle since 2009), our indicative theme on Cryptocurrency Stocks could be a safer way to play the long-term upside from cryptocurrencies, without taking a position in the currencies themselves. The theme, which includes semiconductor, payments, and brokerage companies that have exposure to the cryptocurrency value chain, has gained about 9% year-to-date, compared to the S&P 500 which remains up by about 12% over the same period. The theme remains up by about 130% since the end of 2019, versus 30% for the S&P 500. Within our theme, graphics processor major Nvidia NVDA has fared the best, with its stock rising by 30% year-to-date. On the other hand, Advanced Micro Devices AMD has been the worst performer, with its stock down by about 12%.

[4/5/2021] Crypto Stocks To Watch

Cryptocurrency prices have surged this year. Crypto bellwether Bitcoin has almost doubled year-to-date to levels of about $60k as of the end of last week, as more institutional investors warm up to the currency, with companies such as Tesla also indicating that they will accept bitcoin payments from customers. However, investing in Bitcoin and other cryptos is risky at current levels. With Covid-19 cases on the decline and vaccination rates in the U.S. rising, the economic outlook is improving. Bond yields are also trending higher, with the yield on the 10-year Treasury note rising from around 1% earlier this year to close to 1.70% currently. Considering this, investors are moving funds back to real-economy sectors, and it’s likely that non-productive assets such as Bitcoin will eventually be impacted. Our indicative theme on Cryptocurrency Stocks could be a safer way to play the long-term upside from cryptocurrencies, without taking a position in individual currencies. The theme, which includes semiconductor, payments, and brokerage companies that have exposure to the cryptocurrency value chain, is up by about 122% since 12/31/2019, compared to the S&P 500 which is up by about 24%. Here is a look at the recent developments for some of the stocks in our theme.

PayPal, a large online payments processor, allows customers to buy, hold, and sell cryptocurrencies. The company has taken this a step further, launching its “Checkout with Crypto” service last week, enabling U.S. customers to use their crypto holdings to pay at millions of online merchants worldwide.

Nvidia indicated a few weeks ago, that it would be launching a GPU that was dedicated to mining cryptocurrencies. Nvidia has seen gaming GPU shortages in the past, as its gaming processors were being used to mine cryptocurrency. The move should let the company better target the crypto mining space, while potentially alleviating GPU shortages for gaming.

CME Group CME , a derivatives exchange, plans to launch new Micro Bitcoin futures from early May, subject to regulatory approval. The smaller-sized futures contracts are a tenth of the size of one Bitcoin and will be targeted at institutions and sophisticated traders.

[3/16/2021] Crypto Stocks To Watch As Bitcoin Nears $55k

Cryptocurrency prices have surged this year, with Bitcoin now up by around 90% since early January, trading at levels of around $55k currently. However, Bitcoin looks quite risky at current levels due to a couple of factors. With Covid-19 cases on the decline, the economic outlook is improving and bond yields are also on the rise. Considering this, investors are likely to start moving funds back to real-economy sectors, and non-productive assets such as Bitcoin, which rallied big through the pandemic, could be impacted. Our indicative theme on Cryptocurrency Stocks could be a safer way to play the long-term upside from cryptocurrencies, without taking a position in individual currencies. The theme, which includes semiconductor, payments, and brokerage companies that have exposure to the cryptocurrency value chain, is up by about 124% since 12/31/2019, compared to the S&P 500 which is up by about 22%. Year-to-date, the theme is up by 4%, compared to the S&P 500 which is up around 5%. Within our theme, digital payments player Square SQ has been the strongest performer, rising by 287% since the end of 2019, while exchange major CME Group has been the worst performer in our theme, rising by just about 4% over the same period.

[2/18/2021] Which Stocks Should You Buy As Bitcoin Hits $50k?

Cryptocurrency have continued their surge this year, driven by retail and institutional interest. While the crypto market bellwether Bitcoin has soared 5x over the last 12 months and by almost 80% year-to-date, lesser-known crypto Dogecoin is up by over 10x year-to-date. To be sure, these currencies remain a risky investment, given their relative lack of utility and extremely high volatility. Our indicative theme on Cryptocurrency Stocks – which includes semiconductor, payments, and brokerage companies that have exposure to the cryptocurrency value chain - could be a safer way to play the crypto space, without taking a position in individual currencies. The theme has returned about 151% since the end of 2019, compared to about 22% for the S&P 500. The theme is also up 14% year-to-date, versus about 5% for the S&P 500. Payments player Square remains the strongest performer in our theme, rising by over 330% since the end of 2019, driven by its Bitcoin exposure, and also by an increasing preference for digital payments among consumers and businesses. On the other side, financial exchange major CME Group has been the worst performer in our theme, down by about -5% over the same period.

[Updated 1/20/2021] Cryptocurrency Stocks

Bitcoin prices have surged by more than 50% over the last month and remain up by about 4x over the 12 months, due to higher retail and institutional interest. That being said, Bitcoin remains a risky investment, given its relative lack of utility and extremely high volatility. Our indicative theme on Cryptocurrency Stocks – which includes semiconductor, payments, and brokerage companies that have some exposure to the cryptocurrency value chain - could be a safer way to play the crypto space, without betting on individual currencies. The theme has done well, rallying by over 100% over the last year. Below is a bit more about the key companies in the theme and how they have been faring.

Nvidia stock saw big gains over 2020, driven by growing demand for its GPUs from gaming consoles and data centers and its planned acquisition of CPU designer ARM. The company recently indicated that it could restart the production of dedicated crypto mining GPUs, which essentially remove the video outputs that are required for gaming.

Square a payments company, allows users to buy and sell bitcoin via its Cash mobile payment application. The company said that bitcoin-related Revenue surged by about 8x over the first nine months of 2020 to around $2.8 billion.

PayPal a large online payments processor has also reported increasing engagement on its PayPay mobile app after it introduced support for bitcoin last October, with about half its crypto users opening the PayPal app daily.

CME Group the world’s largest financial derivatives exchange, also offers bitcoin futures contracts. The exchange has emerged as the world’s largest futures exchange for Bitcoin, with open interest - contracts traded but not squared off - for the cryptocurrency standing at $2.1 billion.

[Updated 12/7/2020] How Nvidia, Square & PayPal Stocks Are Benefiting From Soaring Bitcoin Prices

Bitcoin prices have surged by over 160% year-to-date, driven by multiple factors including higher institutional interest, fintech companies Paypal PYPL and Square’s moves into the crypto space, and also by a view that scarce digital currency could be a hedge against inflation and a weakening U.S. dollar. Our indicative theme on Cryptocurrency Stocks – which includes semiconductor, payments, and brokerage companies that have some exposure to the cryptocurrency space – is up a solid 110% year-to-date, compared to the S&P 500 which is up by just about 14% over the same period. Key stocks in our theme include Square, PayPal Holdings, Nvidia, and CME Group.

Although crypto likely represents a small portion of these company’s revenues at the moment, it does have the potential to be big. For example, Payment apps Square and PayPal, who make money by buying bitcoin from brokers and selling them to their customers by adding a “spread” stand to benefit as prices and volumes rise. Square’s Cash App generated about $1.63 billion in Bitcoin-related sales in Q3 2020, an 11x jump year-over-year. Similarly, Nvidia also benefits from demand for its top-of-the-line GPUs such as the Ampere lineup from cryptocurrency miners.

[Updated 10/29/2020] Cryptocurrency Stocks To Watch

Interest in cryptocurrency is surging once again with Bitcoin prices up by almost 30% over the last month, driven by growing institutional interest and Paypal’s recent move to allow its customers to buy and sell certain cryptocurrencies. Our indicative theme on Cryptocurrency Stocks – which includes semiconductor, payments, and brokerage companies that have some exposure to the cryptocurrency space – is up 88% year-to-date, compared to the S&P 500 which is up by just about 5% over the same period. This theme could be of interest to investors who are looking for upside from cryptocurrency adoption and prices, but want to avoid buying into the currencies themselves considering the volatility, risk of fraud, or cyber theft, or potential portfolio mandates. Below is a bit more about the stocks in our theme and how they have fared this year.

Square cash mobile wallet app has emerged as a very popular way for people to buy and sell Bitcoin. The stock has gained a whopping 183% year-to-date, as investors bet that Square’s digital payment solutions will continue to gain traction through and post Covid-19. The stock has dropped by about -9% over the last 5 trading days, however.

Nvidia a semiconductor company that is best known for its graphic processing units which are increasingly used in machine learning and AI, is also finding application in bitcoin mining. The stock has gained over 131% year to date although it declined by about -3% over the last week.

PayPal a large online payments processor, has indicated that it would allow customers to buy, hold, and sell cryptocurrencies such as Bitcoin and Ethereum directly within its PayPal and Venmo app. The stock is up by 88% this year and was down by about -1% over the last 5 trading days.

Advanced Micro Devices is a semiconductor major that makes CPUs and GPUs, which are increasingly used in bitcoin mining. The stock has gained about 79% year-to-date and remained largely flat over the last 5 trading days.

CME Group the world’s largest financial derivatives exchange, also offers bitcoin futures contracts. The stock is down by about -18% year-to-date and declined by about -2% over the last week.

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You can buy more things than ever with cryptocurrency these days, from video games to new furniture. But should you?

“I wouldn’t,” says Kiana Danial, author of “Cryptocurrency Investing for Dummies” and the personality behind @Investdiva on Instagram. While there are a few circumstances where it can make sense, the practical answer for most people is no. 

Cryptocurrency markets are notoriously volatile, and the price you pay for an item today may not be what your purchase is worth tomorrow. Plus, many companies experimenting with crypto payments only accept Bitcoin, which experts say is one of the worst cryptos you could choose to pay for something. 

Nevertheless, people are interested in how crypto might work as a payment method. Nearly 20% of all U.S. adults say they’re likely to make a purchase using crypto, according to a recent report by PYMNTS.com, a news and research platform for payments and commerce. But before you cash in your Bitcoin to top up the balance on your Starbucks app, here’s what experts have to say about purchasing with crypto:Don’t Pay With Bitcoin

Bitcoin, the first cryptocurrency, was originally intended to be used exactly like money. Its white paper dubbed it a “peer-to-peer electronic cash system.” But Bitcoin’s frequent and volatile price fluctuations make that unrealistic in practice. 

“The price volatility kind of makes it useless as an electronic cash system,” says Ollie Leech, learn editor at CoinDesk, a leading cryptocurrency news outlet. “No person in their right mind would want to buy a coffee with Bitcoin. Say you pay $3 for the coffee, and tomorrow your Bitcoin could be worth $30. That’s a loss.” 

Just one year ago, in June 2020, Bitcoin’s value was under $10,000. Since then, it reached a high of more than $64,000 and, despite a recent price drop, remains close to $40,000. Imagine a video game that cost $50 worth of Bitcoin last June. If you waited until today to buy it instead, the same price in Bitcoin today would now cost you $200. 

People buy Bitcoin “not because they expect to be able to go to the store and spend it, but because they expect it to hold its value,” says Galen Moore, director of data and indexes at CoinDesk.

What About Other Cryptos?

Bitcoin has failed at its intended mission to become a new currency, but experts say there are other cryptocurrencies better for transacting. “Every one of them are optimized for certain things. For example, you wouldn’t go to the store and pay for groceries with gold,” says Danial — in the same way you shouldn’t spend Bitcoin on your morning latte. 

Some popular cryptos specifically designed to work better for spending include Dash, Manero, and XRP, according to Danial. Stablecoins, like Tether or USD coin, can also make better alternatives for purchasing, since their prices are tied to existing currencies. 

“There are coins that are more like cash,” says Pat White, co-founder and CEO of Bitwave, a company that helps businesses with crypto tax reporting. These coins are a better choice for spending, in theory, thanks to faster processing and lower fees. “They are designed to be spent and used very quickly.”

But in reality, there’s still a downside to using crypto developed to mimic cash to make payments. Take Bitcoin Cash (BCH), for example. BCH came about after the original Bitcoin proved itself too volatile to be used as a new kind of internet money. A group of creators decided to split off from the original crypto and create Bitcoin Cash, which was designed as a more stable version to be used for transactions.  But in practice, Bitcoin Cash is still highly volatile. In the last year its price has run from around $250 per coin to over $1,500, highlighting the risk of using it to buy something at the wrong time.

Taxes are another complication. While you don’t need to report your crypto purchases to the IRS, you do need to report when trading a cryptocurrency for goods or services. Each time you make a purchase using crypto, you need to track your cost basis, or the fair market value of the crypto when you bought it versus when you used to transact, and report that capital gain or loss.

Are There Other Real-World Uses For Crypto?

For American citizens in America, “There’s probably not going to be a good reason to buy things in crypto,” Danial says.  

That’s because the U.S. dollar fluctuates less than the vast majority of cryptocurrencies out there. However, when you consider a currency that’s less safe and stable than the U.S. dollar, the case for cryptocurrency payments increases, says Roger Aliaga-Díaz, principal and senior economist with Vanguard Investment Strategy Group.

Take a volatile currency like the Iranian Rial. “It loses value every single day,” Danial says. “I’m Iranian, my parents are as well, and whenever they go to Iran they try to never convert any money to Rial, because it just goes down.”

Would You Ever Buy Things With Crypto?

While it’s not the wisest financial decision, crypto payments can provide an alternative transaction method for those who don’t have the necessary requirements for opening a bank account, or can’t access traditional financing in a certain place. For example, unbanked people can transfer money to others, even internationally, using their crypto wallets, or make purchases using crypto with participating merchants using apps like BitPay, all without the need to go through traditional financial institutions.

Some people may also choose to buy goods with crypto to capitalize upon the speed of transaction. Globally, “a lot of deals are being made with crypto,” Danial says. “Like, maybe a prince in Dubai wants to buy a Lamborghini from Italy, and wants it immediately and doesn’t want to wait for deposits and bank information and everything, so they purchase it using crypto.”

Crypto transactions are also relatively anonymous — which is why they have a reputation as being used by criminals to buy and sell on online black markets. Crypto’s prevalence as a form of payment for illegal trades persists. It played a role in recovering the Colonial Pipeline — a key gas line servicing the U.S. Gulf and East Coasts — last month, after hackers shut down its computer systems until they were paid $4.4 million in Bitcoin. The U.S. government has since seized back $2.3 million of that ransom fee (most of what was originally paid, since the price of Bitcoin has dipped recently). 

As for businesses willing to accept payment in crypto, expect to see more as Bitcoin and other cryptocurrencies grow in popularity. Some companies may be looking to cash in on the latest craze, or take part in the novelty of a new payment form, while others believe cryptocurrency is the way of the future. A bullish perspective on the future of crypto was behind Tesla’s recent decision to begin offering the option to pay with Bitcoin, although the company declared it would stop accepting Bitcoin payments for cars last month, citing concerns about its environmental impact. 

There may be a future in which digital currencies become more commonplace forms of payments, but for the average American crypto investor considering paying for groceries in crypto, “I think we are not there yet,” says Danial. 

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